Digital divide looms again over superfast broadband for all

An influential internet industry group said today it would cost almost £29bn to deploy a 1Gbit/s new fibre optic line to every home and business in the UK, raising the spectre of a renewed digital divide if operators are able to neglect rural rollout in favour of more profitable urban infrastructure.

The finding comes shortly before a key government advisor on next generation broadband makes his recommendations.

The Broadband Stakeholders Group (BSG), a policy body funded by a who's who of net giants, said the market could probably justify investing in dedicated fibre to about two thirds of the UK population who live in densely populated urban areas.

Alternative technology known as Gigabit passive optical network (GPON) could deliver fibre to the home via a 2.5Gbit/s link shared between 32 premises. The BSG estimates GPON would bring the cost down to £25.5bn. The short-term option of pushing new cable to roadside cabinets (FTTC), allowing for downstream speeds of between 30 and 100Mbit/s using VDSL over existing copper lines, would cost about £5.1bn.

Interestingly, BSG reckons the long term cost of operating a FTTH network will be 30 per cent less than BT spends running the existing copper lines. A FTTC deployment while cheaper in the short term would actually cost more to run than current infrastructure, it said.

The groups's sums have been given as evidence to Francesco Caio, the government's advisor on next generation broadband, who reports next week. He has already said in interviews that he doesn't believe the UK's lack of a coherent next generation internet strategy is causing it to lag behind competitor nations.

Caio also signalled he will likely advise against state subsidies for fibre, suggesting rural areas might be served by wireless technolgies.

The Ofcom Consumer Panel some pre-Caio report lobbying last week, arguing that country dwellers were neglected during ADSL deployment and must not be left behind again.

BSG chief executive Anthony Walker said: "The scale of the costs looks daunting but the report does shed light on how some of these costs can be reduced and what the likely extent of commercial rollout will be. It should focus minds of commercial players, policy makers and regulators on the potential solutions to these challenges."

Most of the extra expense of FTTH compared to FTTC is accounted for by digging up roads and other civil engineering costs, BSG said. It recommends that big savings can be made by sharing ducting with utilities companies, a policy that has proved successful in France and is currently under review by Ofcom.